GBP/JPY advances to 196.00 amid uncertainty over BoJ’s interest rate outlook. The BoJ sees inflation rising in the coming years but has projected weak economic growth. UK’s firm Services PMI has deepened fears of persistent inflationary pressures. The cross strengthens after the interest rate decision from the Bank of Japan came in-line with market expectations. The BoJ kept interest rates steady in the range of 0%- 0.01%.
Meanwhile, softer than expected, Tokyo’s annual Consumer Price Index data for April has deepened doubts over Japan’s inflation, which remains above the 2% target. The annual CPI rose at a slower pace of 1.8% from expectations and the prior reading of 2.6%. Tokyo CPI excluding Fresh Food softened to 1.6% from the consensus of 2.2% and the former reading of 2.4%.